Profit-maximizing competitive firms will not discriminate in the hiring of workers unless consumers exercise a preference for discrimination in product markets.

Question

Quizplus · Accepted Answer

Profit-maximizing firms will hire the most qualified and productive workers regardless of their race, gender, or any other characteristics. Discrimination in hiring would reduce the firm's profitability as it would limit the pool of potential workers and increase costs. However, if consumers exhibit a preference for products produced by firms that discriminate, then the firms may consider such behavior to be profitable and take actions accordingly.

Profit-Maximizing Competitive Firms Will Not Discriminate in the Hiring of Workers